There was a talk at TEDGLobal 2010 about Milo, given by Peter Molyneux.
Molyneux ended the demonstration with the shocking truth that all the world's Milos are going to form a Borg-like hive mind, with the AI data "in the cloud" (as Wired puts it), continually learning from individual interactions
http://www.joystiq.com/2010/07/13/milo-meet-ted-molyneux-dem...
Very interesting...